RPG Life sciences hosted a conference call on May 2, 2024. In the conference call, the company was represented by Mr Vishal shah- CFO and Mr Yugal Sikri- Managing director.

Key takeaways of the call

Domestic Formulations, the biggest contributor to the company’s business, recorded 15% YoY sales growth in FY24. The company registered growth in both value and volume - significantly and consistently ahead of the market based on its 5 pillar-growth strategy.

Company’s new products contribution in domestic formulations business improved consistently (currently >25%) because of new launches in specialty & chronic segments and line extensions of legacy products.

The company intends to enter other specialties like Gastro and Derma, which will emerge as future growth drivers of domestic formulations business.

The International formulations business registered 15% YoY growth in FY24. International formulations business new products/customers/markets contribution continues to improve (currently stands at 30%).

In FY24, API business registered healthy growth of 7% YoY driven by continuous thrust on new customer development. The company is modernizing its API Plant and building strong product pipeline. The company aims to make API its third engine of growth.

The comprehensive smart life cycle management program is shaping some of the company’s ‘textbook’ legacy brands into mega brands and niche specialty portfolio into mega portfolio.

Both Naprosyn and Immunosuppressants segments clocked sales greater than Rs 70 crore each in FY24. Management expects both segment to reach its aspirational target of Rs 100 crore sales each.

New launches in specialty and chronic therapies are helping the company’s Specialty business. The company is also launching new products in new category – biosimilars.

In FY24, Domestic Formulations contributed 67% to total sales, International Formulations 18% and APIs 15%.

The company’s 5 pillars of profitable domestic business growth are, (1) Product portfolio rejuvenation, (2) Strategic brand assets building, (3) Customer coverage deepening, (4) Sales force effectiveness augmentation and (5) Profitability improvement.

The company’s 3 pillars of step-wise global business build up are, (1) building immunosuppressant portfolio, (2) Focus on products with specific/ competitive advantage and (3) Expand footprints in emerging/select markets like Myanmar, Vietnam, Philippines, Sri Lanka, Egypt, Sudan, Thailand, and South Africa.

The company continues to invest in plant upgradation and capacity expansion.

The company indicated that large part of capex is done and now new capex will mainly be maintenance capex.

The Company continues to remain debt-free.

The company’s Salesforce productivity is consistently improving (currently >5 lakhs).

To improve margin, the company continued its diligent thrust on cost control measures like Opex and COGS.

The board Recommended equity dividend of Rs 16 per share of Rs 8 each (200 %) for the financial year ended March 31, 2024.